Prior to choosing your insurance, you have to follow the
essential instructions given below.
Decide What You Want to Buy
In buying insurance, such as coverage and price, list the
points that are important to you. By reading books and magazines and by means
of talking with several insurance salespersons, discover what insurance
products are available to
cover the points on your list.
For example, auto insurance can include liability,
collision, comprehensive, uninsured motorist coverage, and medical payments. Of
these, only liability coverage is legally required in amounts sufficient to
meet California's financial
responsibility law. Not everyone wants or needs other types of coverage.
In the "Talk To Us" section,
contact the CDI by using the information provided. From both print and online,
the CDI can provide brochures on auto, home, life, health, small business,
title and other insurance topics.
Consider the amount of insurance you will require. Replacement
cost is a good benchmark to use for property insurance.
In liability insurance,
which covers legal responsibility for specified causes of loss, the amount
needed is more difficult to determine because of the unknown nature of
potential liability losses.
Determine your price range. The insurance you want may be
more expensive than your projection, but you will find significant price
variations by comparison shopping. Also, you may be able to achieve your price
range by making adjustments in the coverage you buy.
Comparison Shop
Compare the rates of different companies, as prices vary
considerably. However, remember that "you get what you pay for." Ensure
to meet your list of important points. To determine if the coverage,
deductibles, and limits are similar to each other, review and compare all
quotations.
Deal with companies, agents, and brokers known to give a
high level of service that meets your requirements. For recommendations based
on their experiences, consult with knowledgeable friends and respected advisors.
Conduct Research
Entertain multiple proposals from different insurance
companies. This is an excellent way to learn about competing insurance products
and to interview potential brokers or agents at the same time. By gathering
relevant information, you have a greater likelihood of making an informed
decision.
Consider carefully your choice of broker or agent and
insurance company. Since purchasing insurance can be time consuming, costly,
and complex, you need to find a broker or agent and insurance company that you
can rely upon.
Choosing a broker or agent should be handled similarly to the
process you would use to hire any consultant (such as: an accountant, tax
advisor, or banker).
Document and Understand Your Transaction
Insist that all promises made to you about future costs,
benefits, or coverage be in writing. When your policy is delivered, ask the
broker or agent to go over the policy language and conditions, including any
promises that are specifically made as part of the policy contract.
Keep in mind that only the insurance company has authority
to change insurance policy provisions. Question any broker or agent who claims
to have policy revision authority. Contact the insurance company directly to
verify the information related by the broker or agent If in doubt.
For everything you sign, obtain copies of them. For any
payment you make, obtain receipts.
Never pay in cash. All checks should be made
payable to the insurance company or to the agency, not personally to the broker
or agent. Ensure that all receipts and checks show the policy number and the
name of the insurer receiving the payment.
Any receipt should also be signed and dated by the representative
receiving the payment from you. Keep receipts and canceled checks in a safe
place for the duration of the policy as evidence of payment
Request copies of all illustrations or proposals that are
shown to you, so you can study the illustration or proposal at home without
pressure. This way, you will get a better understanding of what your insurance
program is designed to do.
Use the checklist you have created to be sure that important
points are covered. Many consumer complaints arise because the buyer does not
understand the coverage or limitations proposed for the policy.
Review the Policy as Soon as You Receive It
Read your insurance policy. The insurance policy is the
written agreement between you and the insurer. It includes duties that the
insurance company must perform and duties you must perform under the contract.
The CDI receives many complaints from consumers who purchase insurance and then
fail to read their policy. Often, at some later time, they discover that the
policy does not cover what they thought it did.
If substantial time has passed,
it may be too late to resolve the issue. Most insurance companies are not
willing to retroactively change a policy, especially after a loss has occurred.
Check to see if a 'free look' period is offered. Some
policies provide a free look period (10 to 30 days after delivery of the
policy) during which the buyer may cancel for a refund by writing directly to
the insurer.
Utilize this time period wisely to completely review the policy.
The only way to be sure that the contract between you and the insurance company
is what you authorized is to read the policy as soon as it arrives.
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